GNSS Markets and Applications - Understanding GPS: Principles and Applications - page 637

civil, as these two terms will be used interchangeably) segments. Market studies are
usually performed by researchers versed in consumer electronics markets. Organi-
zations performing market studies can count users, rely on sales projections of simi-
lar products, draw upon earlier experiences with those products, use existing
modeling, and make educated guesses as to the potential for growth. In most cases,
these studies are weak in one or more areas (e.g., aviation and marine), but strong in
others like consumer products or mobile location services. This is not surprising, as
most of these research firms are likely to specialize more in some particular market
segments than in others. They do a great job in a micro sense with demographics,
historical data, focus groups, surveys, competitive analyses, and such. Their results
are used to decide on investments in new products and new ventures, but in a macro
sense they just cannot accurately describe, let alone forecast, the totality of some-
thing as multifaceted as the GPS market. It is doubtful that anyone could perform a
comprehensive forecast with high confidence. The attempt provided herein
provides a starting point for delving deeper into particular market segments.
Almost all previous studies have relegated the military market to a small frac-
tion of the civil market. While it is true that the total dollars expended in the mili-
tary market is small compared to the total for civil markets, it is nonetheless
significant (over $25 billion spent to date) [8]. It endures and provides seed money
for developments that often lead to new or enhanced civilian applications. Even
more importantly, the military value of GPS is the primary reason why it remains
funded, supported, and sustained, thus enabling the civil market. Because the civil
component has become so important, there is no doubt that civil GPS services will
be maintained even if the military eventually migrates to some new technology to
satisfy its navigation, positioning, and timing needs. Furthermore, the military is
planning on using GPS at least until 2030. While there are significant differences
between commercial and military markets, consider that in the commercial
marketplace:
• The market size varies smoothly.
• The seller bears the development risk.
• There are many buyers.
• There are many competitors for market share.
• There are many similar products.
• Prices are set by marginal utility.
While in the military market:
• We see erratic buying behavior due to changing requirements and budgets.
• The government usually bears any development risk.
• There are relatively few buyers.
• In most cases, there are few competitors for market share.
• Product requirements vary significantly among customers.
• Performance is more important than price.